iPad Users Don’t Want their Pay TV

The Diffusion Group (TDG) announced its latest research suggests that iPad users and potential iPad buyers are more likely than average adult broadband users to either downgrade or cancel their pay TV service.

New Research from TDG finds Strong Relationship between iPad Use or Intention to
Purchase and Likelihood to Downgrade or Cancel PayTV Service

Frisco, TX (November 11, 2010). New research from The Diffusion Group (TDG) has discovered that iPad Users and Intenders—those who own or are likely to purchase an iPad in the next few months—are significantly more likely than average adult broadband users to either downgrade or “cut the cord” and cancel their PayTV service.

“Despite the fact that cord-cutting remains more widely discussed than carried out, forward-looking research continues to accumulate in support of the hypothesis that specific groups of consumers are quickly warming to the idea,” notes Michael Greeson, TDG founding partner and director of research. “Certainly this applies to iPad Owners and Intenders.”

In terms of cord-cutting tendencies:

* More than one-third of iPad Owners (33.9%) are to varying degrees likely to cancel their PayTV service in the next six months, more than twice the rate among iPad Intenders (13.5%) and three times the rate among average adult broadband users (9.6%).

* 12.9% of iPad Owners are highly likely to cancel their PayTV service in the next six months, twice the rate among iPad Intenders (6.4%) and three times the rate among average adult broadband users (4.3%)

In terms of downgrade proclivities:

* 35.5% of iPad Owners and 29.5% of Intenders are to varying degrees likely to downgrade their PayTV service in the next six months, compared with 20.7% of average adult broadband users.

* 27.4% of iPad Owners are highly likely to downgrade their PayTV service in the next six months, compared with 14.2% of iPad Intenders and 10.0% of average adult broadband users.

“Many new video purveyors such as ivi.TV and Sezmi are looking to rapidly achieve mainstream status by casting the widest net possible with little in the way of targeting, outside of general ‘bad times’ messaging. It is TDG’s belief that it may be more lucrative to focus on specific user groups who are more inclined toward anti-incumbent behavior, a descriptor that certainly applies to iPad Owners and Intenders.”

Greeson notes that this new research will mean different things to different readers. Major broadcasters and cable networks, for example, will likely see this research as reason to restrict their online offerings in general (and iPad apps in particular) to low-value content so that viewers are motivated to maintain their PayTV relationships. On the other hand, content creators looking to go over-the-top will view this research more positively, as evidence that targeted efforts to expand iPad-centric content offerings will be rewarded with dramatically improved viewership.

This new research is the product of TDG’s landmark primary research study, Benchmarking the Connected Consumer, a survey of primary decision makers in the U.S. broadband household that quantified stationary, portable, and mobile CE ownership, placement/use within the home, and Internet connectivity. As well, the study evaluated consumer interest in a variety of “connected consumer” services. For more information about this new study, please contact our sales team.